Midlands-based airline group bmi has flown back into the black - notching up annual pre-tax profits of £2.1 million compared to the previous year's loss of £9.8 million.
Turnover for the group, parent to fast growing no-frills airline bmibaby, rose 7.5 per cent, from £772 million to £830 million.
Bmi yesterday said that the number of passengers it flew during the year to December 31 rose by 11 per cent to 10.5 million, while its load factor climbed from 67 to 70 per cent.
Bmi's chairman, Sir Michael Bishop, said: "A robust approach to controllable costs and an ability to compete effectively in exceedingly tough market conditions has had a positive impact on our trading results."
Sir Michael added that the group's Blue Sky cost cutting programme - which aimed to reduce operating costs by £300 million over three years - had already proved effective in its first full year.
He said that "significant" savings had been achieved with the introduction of single aircraft type operations with bmibaby and ABI Regional.
Airbus aircraft will also make up the entire fleet of Heathrow mainline operations by June this year.
"For the first time in three years there has been no decline in our overall yield which in 2004 was identical to the previous year," said Sir Michael.
"Seats available increased by seven per cent, primarily arising from the introduction of more longhaul destinations from Manchester and the first full year of bmibaby operations from the same airport.
"Escalation of fuel prices during the year cost the group £11.1 million net of hedging."
Turning to the performance of bmibaby, which saw a 16 per cent rise in the number of passengers carried during 2004, he said: "In January the airline introduced what has since proved to be its most successful base launch to date from Birmingham.
"The success of bmibaby has had an important role in absorbing part of the overhead cost of the group which otherwise would have had a detrimental impact on our mainline operation."